Volatile rand remains a threat to lower petrol prices, says economist
The latest predictions come after the announcement that some fuel prices will drop for a second consecutive month from Wednesday.
JOHANNESBURG - FNB economist Koketso Mano believes the latest drop in petrol prices may be shortlived if the rand fails to find its footing.
The latest predictions come after the announcement that some fuel prices will drop for a second consecutive month from Wednesday.
Petrol will cost between 17 and 24 cents less per litre, while households will pay close to R3 less for a kilogram of LP gas.
The Department of Mineral Resources and Energy said that a drop in oil prices and a stronger rand helped push down some prices.
Mano said that the volatile rand remained a threat.
"While we should continue to find reprieve from lower oil prices this year, relative to last year, the risk to the rand is still material, especially when considering key local risk events that are yet to unfold. We also predict that oil prices should find support from a seasonal uplift in demand, particularly in the northern hemisphere, as well as the contained improvement in activity in China in the second half of the year. So overall, this supports a slight rising trend in fuel prices for the remainder of this year, but we speak with caution given the high volatility that is featured in the data."
